One of the things that are the most difficult for us is getting into a new market. It brings a lot of uncertainty with it and potentially, also risk. On the other hand, as real estate investors, we must adjust our strategy and be able to move from one market to another to follow the opportunities.
So, how can you move to a new market and reduce the risk?
I don’t think there is one answer to that question. It also depends on the level of risk you are willing to take…but, here are some steps we are following when approaching a new market:
- Do your research on the economy in this market using different sources like Marcus & Millichap, the US census data, local and national news/business magazines etc. You would like to gather information from different sources in order to balance them as most of them have an agenda.
- Start analyzing deals in that market. By doing so, you will be able to get the feeling about this market and compare it to other markets you know. Analyze at least 15 deals in different locations so you can assess the areas you want to stay away from.
- Get in touch with different professionals in that market and ask their opinion. For example, we contact management companies to get their feedback on the properties we have analyzed. It is extremely important to rely on input from real estate brokers only and ask others like property managers and other investors.
- Go and visit the market. You should spend at least 3-4 days driving around and looking at properties before you make your decision about the market. During those days, you should meet with real estate brokers, property managers, lenders and contractors to get to know how that market operates. Those meetings will also serve you later when you will need to build your team if you have chosen to operate in that market.
Start operating in a new market is uncomfortable by nature, but it could bring great benefits and returns in the future. We have learned that when we push ourselves over the hurdles, the results will follow. We encourage you to take a leap as well!!
If you have further questions, or if you would like to know which markets are we currently looking into, register to our newsletter so you can get the latest updates and latest deals at www.kerra-investmens.com